Wells Fargo has revealed the extent to which Minnesotans were affected by its phony account scandal, which saw bank employees create potentially more than 2 million deposit and credit accounts in customers' names in order to meet sales targets.
The embattled bank released more information about the scandal in response to questions from the House Financial Services Committee, with Minnesota U.S. Rep. Keith Ellison among those getting answers.
Wells Fargo fired more than 5,300 staff after it was found they had been taking out credit cards or overdrafts in customers' names and creating phony, fee-generating deposit accounts and transferring money from other, legitimate accounts to pad them out.
Many of these happened without customers' knowledge or permission over a period of five years, with the company earning $10 million in fees and charges as a result over that period.
Rep. Ellison questioned the bank about the impact on Minnesotans, and his staff sent GoMN a copy of the responses from Wells Fargo on Monday. Here's what they revealed.
- There were potentially 14,848 unauthorized credit card accounts set up in Minnesota customers' names.
- There were 16,306 deposit accounts that potentially experienced "simulated funding" – which is when money is taken from an authorized account to pad other, fee-generating deposit accounts set up without customers' knowledge.
- Of the 5,300 staff fired for their involvement in the scandal across the country, 172 of them were in Minnesota.
The reason the account numbers are being referred to as "potentially" unauthorized is because Wells Fargo isn't 100 percent sure that's the case for all of them.
It notes that of those they've contacted about potentially unauthorized credit cards, only around 25 percent of customers said they either didn't approve the credit card or couldn't remember if they had or not.
But while the majority of customers affected in Minnesota may have only had one credit card, overdraft or other line of credit taken out/increased in their name, some were targeted multiple times – particularly those who were victims of simulated funding.
Wells Fargo reveals that in four cases, customers' deposit accounts were used for the simulated funding of phony accounts on at least 11 occasions.
Wells Fargo was fined $185 million by the Consumer Finance Protection Bureau (CFPB) over the scandal, and NPR reports that it is looking to recoup $75 million of that from two executives who oversaw the company and sales division at the time.